Opinion
NOT TO BE PUBLISHED
Superior Court County No. D302424, of Ventura Thomas J. Hutchins, Judge
Gary Byron Roach for Appellant.
Steven A. Debbas for Respondent.
COFFEE, J.
Brett Cunningham (husband) appeals from a judgment on reserved issues in the dissolution of his marriage to Sandy Hollon (wife). Husband contends that the trial court should have ordered repayment of his separate property loan to the community before it divided the community estate pursuant to Family Code section 2640; that the court retroactively modified accrued temporary support in violation of section 3603; that the court erroneously determined that husband had no separate property interest in the community business; and that the trial court did not equally divide the community estate. We affirm.
All statutory references are to the Family Code.
Factual and Procedural Background
Husband and wife separated in May of 2003 following a marriage of seven and a half years. There is one child of the marriage, born in 1997. The parties resolved custody and visitation issues by stipulation.
Before the marriage, husband had a tree trimming business, B. C. Tree Service (BC Tree). After the marriage, wife joined the business and then began a separate brush clearance business, B. C. Property Maintenance. In 1998, both business were incorporated into Cunningham Property Maintenance, Inc. (CPM). Husband and wife were the only officers and shareholders of CPM. At the time of trial, wife alone operated CPM. Husband claimed a separate property interest in CPM based on contributions of equipment from BC Tree.
During the marriage, husband and wife purchased real property including properties on Mariposa Street (Mariposa), Norway Drive (Norway) and Casitas Vista Drive (Casitas Vista). It is undisputed that these properties are community property. Husband owned real property on Cypress Street, and it is undisputed that this is his separate property.
In 2003, husband used an equity line secured by his Cypress property to loan $125,000 to CPM. The money was used to meet various CPM expenses, and to purchase a bulldozer and a truck.
Wife filed a petition for dissolution in February of 2004. In March of 2004, husband requested temporary child support and temporary spousal support, among other things. The court heard the matter on May 4, 2004. It continued the issues of temporary child and spousal support pending receipt of the expert's report. It had insufficient information about CPM's finances to determine wife's ability to pay support. Counsel stipulated to appointment of an expert to determine the value of CPM and income available for support ~(RT 32-33)~pursuant to Evidence Code section 730. The court ordered wife to "immediately begin paying [husband], on an interim basis and pending the Continued Hearing, $2,500 per week in uncharacterized funds from March 11, 2004 through the Continued Hearing." The court ordered that "[Wife] shall also be entitled to draw $2,500 per week for herself from CPM pending the Continued Hearing."
Wife did not make any $2,500 weekly payments to husband. Husband sought to enforce the order by writ of execution, but on December 13, 2005, the court stayed enforcement of the interim award pending trial. Before trial, on January 3, 2006, the court ordered temporary child and spousal support in the monthly amount of $980 and $630, respectively. The court granted judgment of dissolution and reserved other issues. From January 2006 forward, wife paid the court ordered temporary support.
After trial, the court entered judgment on the reserved issues. The court ordered retroactive child and spousal support for the period from April 1, 2004, through December 31, 2005, in the amount of $779 and $1,896, respectively, for a total retroactive award of $58,850. The court made its temporary child and spousal support order permanent. The court denied husband's request that wife pay, pursuant to the May 4, 2004 interim order, $2,500 per week for the period from March 11, 2004, through January 3, 2006.
The court characterized as separate property of husband the $125,000 loan to CPM. The court denied husband's claim that he had a separate property interest in CPM.
The court characterized and valued the following assets and liabilities as community property: CPM (value $248,000); additional assets of CPM in husband's possession (value $72,000); Norway (value to be determined from sale); Casitas Vista (value to be determined from sale); liability to husband's parents for expenditures they made for the benefit of the Norway and Casitas Vista properties (including $130,000 mortgage payments for Norway, $16,855.18 fees and payments for Casitas Vista, and any real property taxes in an amount to be determined, plus 10 percent interest); $125,000 CPM debt owed to husband ($125,000); personal property (value $49,485); and the contents of a safe deposit box of unknown value.
The court divided the community assets and liabilities as follows. Norway and Casitas Vista, and related liabilities to husband's parents, were awarded equally to husband and wife. The court ordered those properties sold, the liabilities to the parents to be paid from the proceeds of the sale, and the remaining proceeds to be divided equally between husband and wife. The court awarded CPM to wife, valued at $248,000. Husband was permitted to keep the CPM equipment in his possession, valued at $72,000. The court divided equally the $125,000 debt owed to husband by CPM. The court awarded personal property valued at $14,985 to wife and valued at $34,500 to husband. The court awarded the contents of the safe deposit box to be equally divided between husband and wife.
The court anticipated that wife's share of the Norway and Casitas Vista sale proceeds would provide sufficient cash for her equalizing payment to husband. The court reserved jurisdiction "to determine the amount of any equalization payment if the parties are unable to agree on that amount." The judgment made no reference to a promissory note.
Repayment of Separate Property Loan
Husband contends that his $125,000 separate property loan to the community, or at least $50,000 of that amount which was used to purchase a bulldozer and a truck, should have been characterized as a "separate property contribution to acquisition of property" and should therefore have been reimbursed before the community was divided pursuant to section 2640. (In re Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1286.) Husband waived the issue because he did not raise it in the trial court.
Section 2640 provides for priority reimbursement of separate property contributions to the acquisition of community property. Only contributions to equity in property are reimbursable under section 2640 (In re Marriage of Nicholson & Sparks (2002) 104 Cal.App.4th 289, 296), and there is no reimbursement for appreciation or interest (§ 2640, subd. (b)). The separate property contributions are reimbursed before dividing the remaining community property. (In re Marriage of Geraci, supra, 144 Cal.App.4th at p. 1286.)
At trial, husband did not argue that any part of the $125,000 was a contribution to equity within the scope of section 2640. In his written final argument, his request for statement of decision, and in his objections to the proposed judgment, husband asked only that the $125,000 be characterized as "a separate property loan to the community." That is what the court did, as authorized by sections 2622 and 2550. Husband waived his right to attack the trial court's characterization of the funds, because he invited the trial court action to which he now objects. (Nevada County Office of Education v. Riles (1983) 149 Cal.App.3d 767, 779.)
Retroactive Support
Husband contends that he is entitled to $2,500 weekly for the period from March 11, 2004, through January 3, 2006, during which he received no temporary support. He characterizes the May 4 order as a temporary support award and argues that accrued temporary support cannot be modified retroactively. (§ 3603, In re Marriage of Murray (2002) 101 Cal.App.4th 581, 595.) His argument relies on a false premise: the $2,500 interim award for weekly payment of uncharacterized funds was not a temporary support order. It was an order for a draw of uncharacterized funds to equalize income from CPM profits until CPM cash flow could be evaluated for purposes of support. The court did not determine support on May 4. It continued that issue for later determination. The first temporary support order was made on January 3, 2006, and was not modified.
Husband's Claimed Separate Property Interest in CPM
Husband contends that he should have been awarded a separate property interest in CPM because his separate property business, BC Tree, contributed equipment to CPM. We disagree.
In support of his claim, husband offered balance sheets that showed $58,000 in equipment belonging to BC Tree on February 21, 1998, transferred to CPM on March 1, 1998, just after its incorporation. However, husband did not establish that this equipment was acquired by BC Tree before the 1995 marriage. Wife testified that each of these items was purchased during the marriage with community property funds.
Equal Division of Community Estate
Husband contends that the trial court did not equally divide the community estate. Specifically, he contends that the court did not value community obligations, erred by offsetting wife's retroactive support debt, and improperly ordered a promissory note to secure the support award. We disagree.
The trial court must effect an equal division of the community estate. (§ 2550.) Absent agreement of the parties the authority to characterize, value and divide the community estate is a nondelegable judicial function. (In re Marriage of Cream (1993) 13 Cal.App.4th 81, 89.) The court has broad discretion to determine the manner of division in order to accomplish net equal division. (In re Marriage of Connolly (1979) 23 Cal.3d 590, 603.) When one spouse is awarded a community asset (such as the family business) the other spouse must be compensated by an offsetting award of other community property to maintain overall equality. (In re Marriage of Tammen (1976) 63 Cal.App.3d 927, 930.)
In our case, the court ordered in kind division of community assets and liabilities to the extent possible, and ordered an equalizing payment to husband. The court valued liabilities to the extent possible, but was unable to conclusively value the community obligation to husband's parents because property tax payments had not been proven. Wife's counsel agreed that they should be paid nonetheless. The court directed the parties to determine and divide that obligation equally. The court did not calculate the amount of the equalizing payment, but it was readily discernable from the judgment. The only unvalued assets and liabilities were divided equally. The court reserved jurisdiction in the event the parties were unable to agree upon division and the equalizing payment. Reservation of jurisdiction to make such a property division is authorized by section 2550. There was no error in the valuation or division of the community estate.
The court ordered that the $58,000 retroactive support owed by wife to husband be "credited to [husband] in the overall division of community property." Husband contends that a support liability may not be offset by a debt owed to the supporting spouse. (Keck v. Keck (1933) 219 Cal. 316.) This in an accurate statement of law, but it does not apply to this case. In Keck, husband could not offset a temporary support award against a pre-existing debt that wife owed husband for an unrelated matter. (Keck, at p. 319.) "The marital duty of a husband to support his wife is not suspended during the continuance of the marriage because the wife may be indebted to him." (Ibid.) In our case, husband had no preexisting debt to wife and the trial court did not offset support against a debt.
The judgment contains no reference to a promissory note, and husband cites none in the record. We reject his claims related to a promissory note.
The judgment is affirmed. Costs on appeal are awarded to respondent.
We concur: GILBERT, P.J. YEGAN, J.